USPS Gets Nothing From Senate Tax Bill

The lead business story Oct. 12 in The New York Times dealt with the business tax reduction bill that had just passed the Senate. According to the Times, "... the Senate passed a $137 billion corporate bill on Monday that gave something to almost everyone."

Recipients of the various tax benefits included such disparate groups as oil companies, timber producers, movie studios, accounting firms, cruise ship operators, tobacco farmers and even PGA tour pros. The bill also provided help to Chinese ceiling fan manufacturers by eliminating $44 million in tariffs over the next two years. The fans are sold through The Home Depot, based in Georgia, and the provision is considered a favor to Sen. Zell Miller, D-GA, who spoke at the Republican National Convention.

Of course, one corporation that didn't receive any benefits from the bill was the U.S. Postal Service. The USPS could have used some help to reduce its annual pension fund payments by several billion dollars, since it has a significantly overfunded pension program.

In fact, the USPS is on pace to overfund its pension program by $78 billion. However, because of convoluted federal bookkeeping, this overpayment has the effect of reducing the size of the federal deficit. No one from Congress was willing to stand up for the USPS. As a result, the postal service will be forced to have a higher-than-necessary rate increase in early 2006. Estimates are that the increase for advertising mail could be as high as 18 percent.

Some in Congress supported the aforementioned tax bill because they thought it was a jobs bill. Some of the bill's supporters relied on a 2003 study by economist Alan Sinai, which considered that the bill could add 600,000 jobs in the two years following its passage.

It's unfortunate that Sinai wasn't asked to do a study to determine how many domestic jobs will be lost or not created by an 18 percent postage rate increase on advertising mail. Sometimes I wonder if the mailing industry really believes the study that says it accounts for $900 billion in revenue, 8 percent of GDP and 9 million jobs.

Several months ago I noted in this column that the USPS has a problem in that it is omnipresent. While it seems to be everywhere, it has no solid geographic political base that it can count on. Perhaps the Board of Governors should commission a study to determine whether the USPS could be better served by relocating to a state, which would provide a lower operating environment for its headquarters and a more aggressive political support base.

Perhaps the most important postal-related thing the Senate did in this session is something that, to date, it hasn't done. The Senate has adjourned without approving the nomination of Dawn Tisdale to the Postal Rate Commission. This is a great victory for those few who publicly stated that Tisdale, though a fine person, was clearly not qualified and lacked the background to take on the duties and responsibilities of a PRC commissioner. It's unfortunate that more did not speak out against the Tisdale nomination.

Many Washington insiders have told us that once a nomination is made, it's a done deal. Well, we've seen clearly that this has not been the case with a number of judicial nominees, and now with a PRC nominee. Hopefully, this will be a wakeup call to the mailing industry and its leadership that it can, and should, influence political events.

It's time that the mailing industry stood up, with the backbone provided by 8 percent of the GDP, and demand that nominees to the Board of Governors and the PRC be well-qualified for the assignment. And mailing industry leadership must be prepared to testify at Senate hearings, pro or con, regarding a nominee's qualifications. This subject is too important for industry leadership to duck.

The good news on testifying is that the administration has lobbed a softball to the mailing industry in the form of two highly qualified nominees to the Board of Governors.

One nominee, Carolyn Gallagher, a businesswoman and Harvard MBA, was a member of the President's Commission on the U.S. Postal Service. The other, Louis Giuliano, is chairman/CEO of a Fortune 500 company. Both nominees appear qualified for board seats. If after review that conclusion holds up, mailing industry leaders should testify in support of their nominations at Senate confirmation hearings.

In previous articles I've commented about the need to make changes to the National Postal Forum. I attended the most recent forum in Washington, DC. Changes were made, and the forum and its attendees exhibited a vitality that has been missing in the past. Let's hope it continues.